How do you treat jurisdiction-specific hybrid instruments (e.g. profit-participation certificates) in the bridge?
Hybrid instruments sit between debt and common equity − equity-like features (no voting rights, a profit-dependent coupon) but debt-like features (fixed redemption, no real control). Treatment: like preferred equity → deduct from EV. Market value: for a listed hybrid, the exchange price; otherwise book value + accrued coupon. Silent participations (common in family-owned mid-sized businesses): similar treatment − debt-like, at market or book value. Mezzanine capital: usually treated as debt-like.
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'Hybrid stack $120m: $50m profit-participation certificates (market value), $40m silent participation (book), $30m subordinated mezzanine (face value) − all subtracted from EV in the bridge.'
The source card taught a DACH-specific instrument, the German/Austrian *Genussschein* (profit-participation certificate). What generalizes is the universal treatment − hybrids handled like preferred equity and deducted from EV; the local instrument is retained here only as one named example, flagged for review.